What Is Your Business Actually Worth? The Three Numbers Every Owner Should Know

Ask ten owners what their business is worth and most will quote a number they heard at a conference, or a multiple a friend got in a different industry five years ago. When a real buyer shows up, that number rarely survives contact. The owners who sell well are the ones who understand three numbers — and the difference between them.

1. Your true earnings number

Buyers do not pay for revenue. They pay for the cash flow the business reliably produces for its owner — usually expressed as SDE (seller's discretionary earnings) for smaller companies or adjusted EBITDA for larger ones. Getting this number right means normalizing for owner compensation, one-time expenses, and personal items running through the business. Done honestly, it is the foundation every serious conversation is built on. Done sloppily, it is where deals start to fall apart in diligence.

2. The multiple the market will actually pay

Multiples are not folklore — they move with your industry, your size, your growth, your customer concentration, and the buyer pool that exists for a business like yours right now. Two companies with identical earnings can trade at meaningfully different multiples because one has recurring revenue, a management team that stays, and clean books — and the other has a hero owner and a handshake customer base. The multiple is not what you deserve; it is what the market will defend.

3. Net proceeds — the number that actually matters

Between the headline price and what lands in your account sit debt repayment, transaction costs, taxes, escrows, and the structure of the deal itself. The gap is routinely 20–35% of the headline number. Owners who plan for net proceeds — early enough for structure and tax planning to matter — keep meaningfully more of what they built.

Where to start

You do not need to be ready to sell to know these three numbers. In fact, the owners with the strongest outcomes are usually the ones who learned them two or three years before they went to market — while there was still time to improve them.

Wondering what your business could be worth? Request a free, confidential market assessment from Jackim Woods & Co., or book a confidential intro conversation with Jim Bates. No pressure, no obligation — just a senior-level read on where you stand.